Sam Zell 's bid for the Tribune Co. beat back his well-heeled rivals, but it saddled an already struggling enterprise with over $12 billion in debt. Now the Wall Street Journal wonders how he expects to pay it back. The likely annual interest fees alone will reach $1 billion, only slightly less than the company's entire annual cash flow.
Zell believes his creative ESOP tax structure and a more aggressive approach to the internet can sweeten his cumbersome deal, but the unavoidable truth is that ad sales took an industry-wide dive last summer, and no one expects them to return anytime soon—if ever. The Trib's own revenue dropped 4.3% from March '06 to March '07.